TOKYO, March 8 (Reuters) - Japan’s economy expanded more than initially estimated in October-December due to an upward revision of capital expenditure and inventory data, confirming an eighth consecutive quarter of growth.

It marked the longest uninterrupted expansion since a 12-quarter run of growth between April-June 1986 and January-March 1989 during Japan’s asset-inflated bubble economy, a good omen for sustainable growth.

The annualised growth rate translates into quarter-on-quarter expansion of 0.4 percent in real, price-adjusted terms, against an initial reading of a 0.1 percent growth and the median estimate for 0.2 percent growth.

The upward revision was due to faster-than-expected gains in capital expenditure, a boost for policymakers keen to stoke a virtuous growth cycle in which higher wages stimulate consumer spending, which will in turn boost business investment and accelerate inflation.

“Recent weak data such as industrial output and retail sales for January suggest GDP growth may slow in the first quarter,” said Masaki Kuwahara, senior economist at Nomura Securities.

“Still, Japan’s growth will hold firm at least until summer, led by exports and capital expenditure, with help from the solid U.S. economy.”

With inflation remaining distant from the 2 percent target, the Bank of Japan is widely expected to keep its massive monetary easing intact at its policy-setting meeting that ends on Friday.

Data out last week showed core consumer inflation in Tokyo accelerating to 0.9 percent in February, as the jobless rate hit a 25-year low of 2.4 percent in January, supporting the central bank’s optimistic outlook.

BOJ Governor Haruhiko Kuroda, who is set to serve another term, rattled markets last Friday by flagging for the first time the prospect of an exit from monetary stimulus if his 2 percent inflation target were met - a remark he later tempered.